Build a CFO-Ready ERP ROI Model
Want to get buy-in from your CFO? Learn how to build an ROI model that makes ERP worth the investment.
Introduction
ERP should not be treated as a sunk cost or IT upgrade—it should be evaluated as a strategic investment. Forward-thinking CFOs increasingly demand a detailed ROI model before signing off on ERP selection. According to Panorama Consulting Group, 83% of organizations that conducted ROI analysis before implementation reported that their ERP project met or exceeded their financial expectations[1]. This blog outlines five steps to build a CFO-ready ERP ROI model that delivers confidence, alignment, and clarity before making a major ERP purchase.
Step 1: Identify Measurable Financial Outcomes
Begin with operational pain points and translate them into financial metrics. ERP often drives ROI through labor cost savings, cycle time reductions, and fewer order/invoice errors. Industry research shows ERP implementations often result in a 10–15% improvement in operational efficiency[2].
Step 2: Estimate Time to Value and Payback Period
CFOs want to know when ERP will deliver results. A robust model should estimate when benefits start accruing. Typical ERP payback periods range from 2–5 years, with total ROI between 100%–500%, depending on the organization’s scale and process maturity[3].
Step 3: Account for Total Cost of Ownership (TCO)
Include all components in your TCO estimate: software licenses, implementation fees, custom development, training, and ongoing support. CFOs should see a transparent TCO breakdown before comparing solutions. At Concentrus, we coach clients to build these models prior to selection to avoid surprise overruns and protect ROI.
Step 4: Show Strategic Upside, Not Just Cost Savings
ERP should be framed as a revenue enabler, not just a cost reducer. Strategic benefits might include launching new business models, scaling without extra headcount, or accelerating decision-making via analytics. These qualitative benefits often account for 40%+ of ERP’s total ROI[1].
Step 5: Build a Visual CFO-Friendly Model
- TCO Breakdown
- Payback Timeline
- ROI Percentage
- Strategic Benefit Highlights
Use tools like the Concentrus ERP ROI Calculator to present clean, CFO-approved projections.
Conclusion
ERP success begins with a CFO-aligned ROI model that speaks the language of finance. Building that model before selection reduces risk, increases buy-in, and shifts ERP from an expense to an engine of strategic growth.
Ready to Build Your ERP ROI Model?
Schedule a free 30-minute ERP ROI Strategy Call with our experts at Concentrus. We’ll help you model the financial value of ERP for your business—before you buy.
References
- Panorama Consulting Group. (2023). The 2023 ERP Report: Business Benefits & ROI Outcomes. Retrieved from https://4439340.fs1.hubspotusercontent-na1.net/hubfs/4439340/Reports/ERP%20Report/2023-ERP-Report-Panorama-Consulting.pdf
- Panorama Consulting Group. (2023). Operational Efficiency Gains: 10–15% improvements in year one of ERP deployment. Summarized by Introv. Retrieved from https://introv.com/insights/the-roi-of-erp-maximizing-efficiency-and-value-for-your-business/
- Panorama Consulting Group. (2022). ROI Analyses: 100–500% returns over 1–5 years. Retrieved from https://ventor.tech/erp/what-is-erp-roi-and-why-is-it-important/
About Us
Concentrus is a leading provider of innovative cloud-based enterprise resource planning (ERP) solutions, including NetSuite. Our team of NetSuite experts offers a range of services, including NetSuite price analysis, NetSuite training, and NetSuite integration services.
Our goal is to help businesses of all sizes maximize their investment in NetSuite by providing expert NetSuite cost optimization and implementation strategies. With years of experience as a NetSuite partner, our NetSuite administrators and NetSuite consultants are well equipped to help businesses of all sizes with their NetSuite consulting needs.
Whether you're looking for a NetSuite consultant to help with your NetSuite implementation or you need ongoing NetSuite support, Concentrus is here to help.
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